Targeting a Niche vs. Casting a Wide Net – Direct Mail Marketing

In my last blog post, we discussed the benefits of direct mail marketing in finding motivated sellers. There are numerous ways to generate motivated seller leads in the world of creative real estate investing, but I have found that one of the most effective is through mailing compelling marketing messages directly to their homes – whether via a letter or postcard. However, even within the world of direct mail marketing there are two main schools of thought regarding the most effective, and ultimately the most profitable, way to do it.

The shotgun approach is about casting a very wide net, to a large group of homeowners, in the hopes of finding those who are motivated to sell at an acceptable price. This is oftentimes done by targeting a specific zip code, area, or neighborhood. If there is a subdivision in your town that is known for very low days on market, or is a popular place to live, it might make sense to send a series of letters or postcards to the homes within that neighborhood. The down side to this method is that it tends to be a little more expensive, and certainly less targeted, since there will be numerous owners in that subdivision that have no desire to sell, or a reasonable MOTIVATED to sell.

The sharpshooter approach is much more targeted in its efforts. Similar to a laser scope that pinpoints exactly where it wants the bullet to go, a targeted marketing effort is going to pursue a VERY specific type of seller that has a SIGNIFICANT motivation to sell. A few examples would be to focus on those going through a divorce, someone who has recently inherited a house, or a homeowner that is in foreclosure. This approach oftentimes yields a much higher response rate (and return on investment), which is especially important to beginning investors who have a very limited budget with which to try and generate profitable leads.

In my next post, I will discuss in detail some of the many niches that investors can pursue in their marketing efforts, along with the pros and cons and each one. Every niche, and specific type of motivated seller, has a unique set of circumstances that will dictate both the buying strategy…as well as your exit strategy when trying to re-sell.

Until then, can you think of any good “motivated seller” niches to pursue? Have you marketed to any in the past? What were your results? Leave a comment below, and let’s start a dialogue that we can ALL benefit from…

We have been doing targeted mail marketing for a while now. Whether it be absentee owner, divorce or otherwise. Since we were doing them by hand, we had much smaller batches being sent out but were still getting about an 8% response rate. I definitely think that your response rate is driven mainly by the list (quality over quantity) but I know we have been changing up a few things with our yellow letter to see what gets the best response.

Now that we are delegating this task, we are able to send way more letter and will have a campaign of 1200 dropping by Monday (to absentee owner) and when I get all of the data processed from the first mailing, I’ll comment on the overall success rate of this campaign.